Vonage wants retrial of Verizon patent case

Supreme Court ruling to the rescue

Vonage has asked for a retrial in the patent case which the VoIP (Voice over Internet Protocol) phone company lost to telco giant Verizon. The company wants the trial reheard in the light of a new Supreme Court ruling on patent law.

Earlier this week the Supreme Court issued new guidance on what 'obviousness' means. A patent cannot be granted for an invention that is an 'obvious' extension to existing technology. The Court said that the benchmark used to test obvious – the 'teaching, suggestion or motivation' test – was not the right one and made it easier for patents to be challenged on the grounds of obviousness.

Vonage has now said that its case could have been decided differently under the new guidance on obviousness, which it says puts a greater premium on a common sense view of what should be patentable.

"Vonage is confident this ruling should have a positive impact on its case," said a company statement. "Vonage has consistently maintained it does not infringe on Verizon's technology, asserting in its brief today that the validity of Verizon's patents should be retried by the US District Court in light of the US Supreme Court's decision."

"We are very encouraged by the Supreme Court's decision and the giant step it represents towards achieving much-needed patent reform in this country," said Jeffrey Citron, founder and interim chief executive of Vonage. "The Supreme Court's decision should have positive implications for Vonage and our pending patent litigation with Verizon."

Vonage was found guilty in March of violating patents owned by Verizon relating to the connection of its phone network to the traditional phone system. It was fined $58 million and ordered to pay a 5.5 per cent royalty fee to Verizon on revenue earned by its technology.

In a move that Vonage said threatened its viability as a business, the courts also issued an injunction preventing it signing up new customers to its service.

Vonage argued that the high rate of customer turnover in the VoIP market and its consequent need to sign up new customers all the time just to stay in business meant that the injunction could threaten the whole company. It won a block on the injunction for the duration of its appeal against the decision.

Vonage also said when the verdict was announced that it could produce a technical workaround that would avoid using the disputed technology. It had to admit weeks later that it had no such workaround.

Vonage has had a turbulent time since it floated on the stock market last year. Its chief executive, Michael Snyder, recently left the company and founder Jeffrey Citron took over.